Property management fees are an important thing to consider when you’re choosing a property management company. Many landlords and owners want to know what the cost is going to be before they even hear about the services they’ll receive. There are several different formats for how property management companies can charge owners.
Today, we are comparing two of the more popular ways that management fees are often charged. Remember, it’s important to look for value. This doesn’t always mean seeking out the cheapest rates. You have to compare the services you’ll receive with the amount of money you’re being asked to pay.
A La Carte Property Management Fees
One of the more popular formats is the a la carte format, which means property managers can pick and choose what to charge their clients for certain services. So, you’ll have a separate charge for each function of the management and leasing process. You will be asked to pay leasing fees, property management fees, renewal fees, and additional fees for the services you want such as inspections, eviction help, or even the delivery of certain notices.
Property managers can charge for each individual service separately with this format. Sometimes when property management companies charge multiple fees like this, it seems like they are nickel and diming their owners. It can be difficult to predict what your property management fees will be on a monthly or annual basis. So, owners often do not know what to expect. It’s easy to feel blindsided by the charges that appear each month.
All-Inclusive Property Management Fees
Another format often used by property management companies is the all-inclusive fee. With this type of fee structure, a leasing fee is charged to the owner when a tenant is located, screened, and placed in the rental property. That’s a one-time fee. Then, property management fees are charged on a monthly basis going forward. It will cover all of the general services of a management company, and you won’t have to pay for each individual service.
With this type of fee structure, owners often prefer the consistency. They know up front what they are being charged, and they know what to expect on a monthly basis. This can help with budgeting, and there are fewer surprises when your accounting statement arrives. It’s not uncommon for owners to cancel contracts with other property management companies that may appear cheaper but are actually more expensive because those multiple fees begin to add up. We talk to owners all the time who changed to a company offering the all-inclusive management structure.
We like to have our clients know what their fees will be so there are no surprises. That’s why we work with the all-inclusive concept to keep our clients in the know and happy. We find it’s more transparent, and a better way to do business. If you have any questions about property management fees, please don’t hesitate to contact us at A. Meadows Property Management.